HC orders investigation into Idra president’s equity investment


The High Court on Tuesday asked the Anti-Corruption Commission (ACC) and the Bangladesh Financial Intelligence Unit (BFIU) to investigate allegations of huge equity investments through ‘shell companies’ by Dr Mosharraf Hossain, Chairman of the Insurance Development and Regulatory Authority (Idra).

Following a written request by a retail equity investor, the division bench of Judge M Enayetur Rahim and Md Mostafizur Rahman ordered the ACC and BFIU to submit their reports to the court within 30 days.

The court also issued a rule asking the relevant authorities to explain why the stock transactions through four funds of two alleged shell companies,
allegations of corruption and money laundering against Dr Mosharraf and his wife will not be investigated and prosecution will be brought against them accordingly.

The Secretary of the Financial Institutions Division, the Chairman of the ACC, the Chairman of the National Board of Revenue, the Executive Director of the Bangladesh Bank leading the BFIU,
Director General of the Directorate of Labor were asked to respond to the rule.

Abu Saleh Mohammad Amin Mehedi’s allegations in his Brief Request submitted documents to support his claims that Dr. Mosharraf invested more
Tk4.2 crore in the capital market through two provident funds and two bonus funds from its family businesses – Loves and Lives Organics Ltd and
Gulshan Valley Agro Industries Ltd.

The applicant alleges that Dr Mosharraf uses the two companies as shell companies for his equity investment, citing the disproportion between the size of the investment and the profile of the companies which, according to Dr Mosharraf, have not yet started their activities .

It has registered all four funds as Eligible Institutional Investors (EIIs) and has benefited from priority allocation of primary shares in numerous initial public offerings over the past few years since the inception of the provident and gratuity funds. companies and their employees in 2017 and 18.

In the secondary stock market, all four funds have investments.

Like Mosharraf’s mandate as a director in the two private companies, the chairmanship of the boards of directors of the four funds is prohibited for a president of Idra, the petitioner’s lawyers argued, citing the Idra law of 2010.

At the end of September, after a hearing on a separate petition by the same stock market investor, the High Court issued a ruling against the Financial

The secretary of the institutions division of the finance ministry asked him to answer why Mosharraf’s appointment would not be declared illegal.

The petitioner claimed that the funds were “fictitious” because Mosharraf himself manages the investment accounts of IIAs.

Lawyer Mustafizur Rahman, a lawyer for the petitioner, told The Business Standard: “How many employees do the two companies, which have not yet started operations, have? And how much have employees contributed to the funds in just 3-4 years? “

The Trust Law allows these funds to best invest 25% of their total assets and if the four funds have complied with the law, they must have had more than Tk 12 million in total assets, he said. he argued.

And, to build 12 crore Tk of total assets in the contributory bonus and provident funds of the two companies, he must have more than 100 crore Tk in salary payments to employees and such salary payment requires 600 crore of Tk to Tk 1,200 crore in annual sales.

“Is one of Mosharraf’s self-proclaimed non-operational businesses that big?” Asked the lawyer.

“The funds’ bank account statements also revealed taka crores in transactions,” he added. “Our client pleaded for an investigation into the source of these huge sums.”

When contacted, Dr Mosharraf Hossain told TBS: “To my knowledge, the government department does not prohibit investments in the capital market because it does not take too long to buy and sell in the market. modern scholarship holder.

“I have been a capital market professional and have tried the best ways for my family businesses to invest in the country’s thriving capital market,” he said over the phone.

Regarding the huge investment and the small profile of the companies, he said: “In an investment account one can use the borrowed money as equity, and in addition to that the brokers also offer a margin loan, and the size of the investment may increase over time. “

“A group is desperately working against me because of my regulatory obligations,” he complained.

Meanwhile, the ACC is also investigating the alleged acts of Dr Mosharraf for bribery of a leading life insurer, Delta Life Insurance Company Ltd, almost a year ago.

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